Big Lots reported a 28.8 percent increase in second-quarter net income, which totaled $22.7 million, thanks in part to strong sales of furniture and soft home products.

“Improved presentations” in the home department, especially the expansion of furniture and the creation of new environments centered on vignettes combining furniture with area rugs, helped boost sales in the quarter, which ended on July 30, according to David Campisi, Big Lots’ president and CEO. The “key categories” of upholstery and mattresses registered 7 percent increases in same-sales, Campisi said during a conference call to financial analysts this morning. “Clearly, Jennifer (Big Lots’ core shopper, identified as a woman who controls about 85 percent of the household’s spending) responded well to these presentations,” he said.

Overall, net sales declined by 0.5 percent to $1.2 billion, as weak sales of food and consumables offset the gains in home. Overall same-store sales rose 0.3 percent.

Big Lots’ bottom line got an assist from a 109-basis-point improvement in gross margin, to 40.4 percent, due to the lack of promotions. Selling, general and administrative expenses rose 0.6 percent in dollars and 39 basis points as a percentage of sales, to 34.6 percent.

The company is also projecting a 1 to 2 percent gain in same-store sales for the fiscal year as a whole. “The pillars of our business—Jennifer, our store associates and our shareholders—continue to support us,” Campisi said. “Our company’s culture has never been stronger.”

(Source: hfndigital.com  Author: David Gill)